Democrance: Low-income UAE workers to receive free insurance when sending money home

Published on The National by Nada El Sawy

Democrance, Axa and Hello Paisa team up to offer Dh3,000 in personal accident cover for total disability or death.

InsurTech platform Democrance and global insurer Axa have tied up with money transfer service Hello Paisa to offer low-income UAE workers free accident insurance when sending money home as they look to expand the reach of insurance within this segment.

UAE residents remitting money to their home countries from the Middle East, Africa and Asia through Hello Paisa will have complimentary access to the new “Hello Protect” product, which provides coverage of Dh3,000 in the case of total disability or death.

“Our mission is to make insurance accessible and affordable to those who need it most,” said Michele Grosso, co-founder and chief executive of Democrance. “We give access to new customer segments by working with partners. And remittance in the region is the perfect channel to do that.”

Remittances worth a total of Dh169.2 billion were sent from the Emirates in 2018, according to the UAE Central Bank. The UAE was the second top remittance country in the world after the US in 2017, World Bank figures show.

Democrance, a Dubai tech start-up that connects low-income customers to insurance providers, rolled out a similar product in October with Axa and FinTech platform Rise. Domestic workers signed up to the Rise platform have Dh3,000 in protection in the event of accidental disability or death and have the option to upgrade the policy to Dh25,000 coverage at a cost of Dh5 a month.

Hello Protect is provided free of cost to the customer who is conducting a transaction and renewable after 30 days, as long as another money transaction is performed. The 30 fils premium per 30 days per customer is subsidised by Hello Paisa. The same policy upgrade offered with Rise will be made available with Hello Paisa in the coming months, but no date has been set.

“The starting point is that 99 per cent of low-income workers in the MENA region do not have access to insurance,” Mr Grosso said. “You have to give a product for free through a channel that they know and they trust … then you can start to cross-sell and upsell new products.”

South Africa-based Hello Paisa does not have physical locations in the UAE, but has tie-ups with exchange houses, such as Al Fardan Exchange, Sharaf Exchange and Al Ghurair. It is paying the premium to Axa in a bid to attract customers, in the same way Axa has partnered with Democrance to grow its client base.

On average Hello Paisa has 20,000 transactions a month from the UAE, said Haseeb Mushtaq, UAE business development manager for Hello Paisa.

Hello Protect’s policy, however, does not cover partial disability. But a Dh5 upgrade would include Dh25,000 coverage for partial disability, in addition to accidental death and permanent disability, and Dh3,000 of cover for medical expenses and repatriation.

While personal accident products typically have “15 to 20 exclusions”, the upgrade includes only a few exclusions such as natural death and illnesses to “keep things simple”, said Mehdi Tahri, regional head of casualty at Axa Gulf.

“This is a segment of the population with very low level of awareness in terms of insurance and very low level of trust … so we are making sure everyone understands what is being covered,” said Ricardo Arroyo, Axa Gulf’s chief property and casualty commercial lines officer.

A 2018 UN-funded study from Democrance found that 43 per cent of low-income UAE workers regard life insurance as vital, but almost eight in 10 are uninsured due to the high cost of insurance as well as lack of information.

Since it was founded in 2015, Democrance has partnered with several insurance companies besides Axa, including AIG, Daman and MetLife. The tech platform has connected approximately half a million customers to insurance across its 11 markets in the GCC countries, Egypt, Jordan, Cambodia, Thailand and Mexico, Mr Grosso said.